Palm Oil: Environmental Poison or Unavoidable Commodity- or Both?

Between 2017-2019 Greenpeace published a staggering series of publications that would soon spread across the globe as ubiquitously and smoothly as its subject: palm oil. These began with a report called “Still Cooking the Climate,” followed by “Rogue Trader” in June 2018, and then “The Final Countdown” report in September 2018. These reports revealed serious systemic issues in the palm oil supply chain, primarily stemming from mass deforestation. As Greenpeace showed, millions of acres of rainforest in palm oil producing countries were being cut down, having devastating effects on biodiversity, as well as exacerbating climate change (deforestation results in the release of large amounts of CO2 into the air as a greenhouse gas).

Immediately and inevitably, millions of cries of “boycott palm oil!” arose across from environmentalists the globe, and consumers were suddenly eyeing any grocery store products with palm oil on their ingredient list in disdain. And who wouldn’t, knowing this very product lead to the death of 100,000 orangutan’s in Borneo, and the loss of millions of trees releasing harmful CO2 into the atmosphere? There was no doubt that the world’s largest palm oil producers in Indonesia were showing an outrageous disregard for the environment and the wildlife that depended on the land they were flooding with oil palm plantations. The status quo could not continue, and environmentalists and consumers sure wouldn’t let it.

Yet there was another layer to the palm oil story, that wasn’t reaching consumers as they began to eliminate all products containing the product from their grocery carts. When we begin an outright boycott of a commodity that is produced on land in developing nations, what happens to the people who farm that land? Who work on palm oil plantations and depend on that tiny amount of income for their family’s livelihood? One may ask those questions and immediately the great so-called “battle” between economics and the environment comes to mind; the battle which economists who are also involved in environmental work work so hard to mitigate. And such was the question I asked myself in 2019 as I was contracted by an agriculture business in the US to dig deep into the palm oil issue. If palm oil was indeed the monstrous environmental poison Greenpeace and others had proved it to be, and us consumers were right to boycott it, what were the economic consequences to the developing countries and their people that produced the commodity? A commodity which, I would soon find out, is also fact found in a staggering half of all items found in Western supermarkets.

I was contracted by an agriculture business in the US to dig deep into the palm oil issue, and sort out the facts from fiction. I was supposed to answer a tough and morally conflicting question: were there economic consequences to the developing countries who produce palm oil, now being boycotted by developed countries cross the globe? If so, did the possibility exist- or could it exist in the future- for palm oil to be produced sustainably?

In all honesty I wasn’t sure if I was the right person for the job, as I am a hard-core environmentalist especially when it came to climate change. But I always consider a challenge something to take head on as an opportunity, and expand my own knowledge especially if I know only one side of the story- even if that side has all the data to back it up. If there was any verifiable evidence to back up the other side, then there must be a compromise in there somewhere- holding true to my firm belief that the environment and the economy does not have to be a zero sum game.

Snapshot of consulting project analyzing

“The Palm Oil Industry & Economics”:

Arrow image by OpenIcons from Pixabay 

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